2021-Whitepaper-PRESS.pdf 1 1/31/21 10:10 PM 2021Four WHITE Strategies for Wisconsin PAPERS as we Cross the Coronavirus Chasm C M Expand the supply Y of human capital CM Improve Access MY to Capital CY CMY K Improve the tech infrastructure Make it easier to be an entrepreneur ii Four Strategies for Wisconsin as we Cross the Coronavirus Chasm The Role of the Tech Council The Wisconsin Technology That has been our approach since Council is the bipartisan, non- the early 2000s, when “Vision profit science and technology 2020: A Model Wisconsin policy adviser to the governor Economy” was issued by the Tech and the Legislature. As such, Council as a roadmap to improving the Tech Council periodically an economy in transition. This issues “white papers” and report contains a look back at the special reports to assist those metrics established in 2003 and policymakers and others. assesses how well Wisconsin has performed over time. The ideas offered in the Tech Council’s 2021 white papers Tom Still Greg Lynch The pandemic has taken its are intended to set the table for a President Chairman toll worldwide, nationally and renewed public discussion about in Wisconsin. However, the improving the state’s tech-based fundamentals of a strong economy economy as it recovers from the many challenges of the remain in place and serve as a foundation for moving COVID-19 pandemic. ahead. They include emerging priorities; restatements Our ideas have contributed to past success, as and updates from previous white papers; and ideas documented in “How past white papers have helped” contained in legislative or executive branch discussions. in Section 5 of this report. They include improvements Some are based on our knowledge of innovative ideas in in Wisconsin’s investment capital standing, human other states, especially those states with members in the capital innovation, building a strong infrastructure and Tech Councils of North America. generally making it easier to be an entrepreneur in the great state of Wisconsin. Most ideas are brought forward by our board members, staff, partners, members of our Tech Council Innovation We recognize some proposals in this report will Network and others – entrepreneurs, investors, service require investment, but we also expect those policies, if experts and researchers – who take part in our events implemented, would generate more economic activity and webinars. and tax revenue over time. Our ideas often draw upon our understanding We are pleased to offer our 2021 white papers report of Wisconsin’s tech-based economy, which has for your consideration. We invite you to read on to learn its strengths and weaknesses. We advocate a more about the depth and breadth of Wisconsin’s tech- comprehensive look, not a focus on any single metric. based economy and it how it can help lead the way to a full recovery. CONTENTS Executive summary: ......................................................2 Section 5/ Legislative update: .......................................20 Section 1/ Expanding human capital: ...........................6 Vision 2020: A Model Wisconsin Economy: ...............22 Section 2/ Improve access to investment capital: ..........10 Vision 2020 metrics chart: ............................................24 Section 3/ Improve the tech infrastructure: ..................14 Tech Council Investor Networks map: .........................26 Section 4/ Making it easier to be an entrepreneur : ......18 The Tech Council’s national affiliations: .......................28 2018 WHITE PAPERS 1 CROSSING THE CORONAVIRUS CHASM Executive Summary Executive Summary Recommendations in the Wisconsin should be apportioned among students in the three sectors, as is currently the case. In other words, 55 Technology Council’s 2021 white papers percent for UW students, 20 percent for technical report fall into four major categories: college students and 25 percent for Wisconsin citizens attending a private, nonprofit college in this state. This 1. Enhance workforce development and training, “K cost would be spread over multiple budget cycles and through Gray,” while re-investing in higher education it would pay for itself over time through rising per (human capital) capita incomes and tax collections associated with that 2. Support capital formation through improvements in revenue growth. existing law as well as innovative strategies to expand 3. Enhance economic impact by focusing on tech participation in the asset class (investment capital) skills development. Over the last decade, tech 3. Focus on tech development as an economic driver, with jobs in Wisconsin have grown 44% with an average an emphasis on how platform technologies can propel wage 62% higher than the state average, according targeted sectors (tech infrastructure) to the Milwaukee Tech Hub. Prior to COVID-19, 4. Make it easier to be an entrepreneur in Wisconsin, from Wisconsin had a gap of technical workers and those jobs were expected to grow 12% per year. startup to scale-up (entrepreneurism) In fact, openings still exist due to a much smaller COVID-related loss in tech jobs than in Wisconsin’s overall job base. The tech industry has a 4 to 5 Within those four broad categories, here are our leading times economic multiplier effect, according to the recommendations: federal Bureau of Labor Statistics. As the Tech Hub has reported, investment in the right skills has an outsized economic impact. However, responsibility Human Capital for development of these high-tech skills has largely fallen on the individual or the employer with limited 1. Recognize the economic value of higher education. public support. Public “disrupted worker funds” don’t A succession of well-researched reports, including often extend long enough for individuals to gain those issued by the Tech Council, have reinforced the the required credentials to make a career change, economic value of post-high school education. This so workers invest in training largely on their own. can take the form of a college degree or credentials in Employers can use apprenticeship models and/or vocational and tech-based trades. The governor and tuition reimbursement, however, cost recovery can take Legislature should (1) constantly recognize the critical years or may be lost entirely because the workforce is importance of talent development and attraction for historically a “mobile asset.” The combination means all sectors of the Wisconsin economy; (2) help to Wisconsin is not executing at scale and the skills gap attract and retain the best faculty and researchers; (3) persists. Two strategies (below) can help to change keep our universities affordable and accessible; (4) that. improve the transfer of knowledge and ideas into a 4. Build talent through employer incentives. Wisconsin prosperous Wisconsin economy, and (5) be aware of employers, with the incentive of a state “Future the competitive world around us, especially in terms of Workers Tax Credit” could better attract and train well capital projects to support research and development. qualified workers. A “Future Workers Tax Credit” 2. Develop talent through means-tested student would provide incentives to employers to invest in aid. To make Wisconsin competitive, annual education and training of individuals (future workers), appropriations for state student grant aid must be empowering employers, rather than government, to raised to bring us to Minnesota’s level for grant aid determine the skills and abilities they most need. spending per undergraduate. This needed increase in the annual appropriation for Wisconsin Grants 2 5. Support apprenticeships, internships and 4. Update the QNBV law. a. Ineligible exclusion training. Strategies include (1) supporting the removals. Allow participation of any business where federal CHANCE in Tech Act, an acronym for innovative application of technology creates scalable Championing Apprenticeships for New Careers business models. Removal of ineligible industry and Employees in Technology, which would award exclusions such as retail would allow participation contracts to industry intermediaries to develop in sectors where the impact of rapid innovation has apprenticeships; (2) support tech internship become particularly evident during the COVID-19 programs that expose college students to Wisconsin crisis. b. Unify tax credit programs. Simplify the companies; (3) encourage establishment of industry angel and early stage (venture) tax credits to one “centers of excellence” that function as training program, which could provide incentives for out- centers and (4) support funding of computer science of-state investment. c. Adjust the percentage courses in K-12 schools. employment constraints to net new “in-state” growth 6. Invest in UW System capital projects that will conditions. For example, a Wisconsin firm otherwise attract talent, grants and industry support. The now qualified under QNBV could expand elsewhere Board of Regents has approved a capital budget by adding sales teams or even acquiring a related plan that includes science, tech, engineering and business and its investors may no longer qualify for health training and research facilities statewide. Wisconsin credits. That’s an unintended penalty on These facilities will attract outside grants, industry growth. support, faculty and graduate student talent while training all students and bolstering local economies through private partnerships and the work of the Tech infrastructure WiSys Technology Foundation. Important note: The UW-Madison is the nation’s only